H2 2004 Development Update

CRH PLC
05 January 2005


Development Strategy Update

5 January 2005


CRH ANNOUNCES FURTHER DEVELOPMENT INITIATIVES TOTALLING EURO 309 MILLION


CRH plc, the international building materials group, today announces 25
development initiatives totalling euro 309 million (including capital
expenditure of euro 66 million on six large projects) undertaken during the
second half of 2004. These initiatives bring total development spend for 2004 to
slightly over euro 1 billion.


Commenting on these developments, Liam O'Mahony, CRH Chief Executive, said:


'2004 has been another strong year for CRH from a development perspective with
total spend exceeding euro 1 billion. The acquisitions and development capital
projects announced today are geared towards building leadership positions across
the building materials industry with the objective of delivering organic and
acquisitive growth and increasing shareholder value.'


The principal initiatives contained in this Development Strategy Update are as
follows:

Europe Materials : three projects totalling euro 19 million

Acquisition of an aggregates business in Finland, purchase of a producer of
aerated concrete in Poland and a major capital project in Switzerland.

Europe Products & Distribution : six deals totalling euro 109 million

Buyout of a concrete products business in the Netherlands and purchase of a
leading manufacturer of concrete products in Belgium; acquisition of an
insulation business in the United Kingdom and a metal-based construction
accessories supplier in the Netherlands; significant expansion of the
Distribution Group's builders merchanting activities in the Netherlands together
with further investment in a regional builders merchant in France.


Americas Materials : six projects totalling euro 111 million

The New York/New Jersey Division acquired a major quarry in northeastern New
Jersey and a sand and gravel pit in New York State. The West Division made an
initial entry into southern Oregon and expanded its operations in northwestern
Iowa. The Central Division bought out a joint venture in Ohio and initiated a
capital project to greenfield a quarry and manufacturing facilities in
Pennsylvania.


Americas Products & Distribution : ten projects totalling euro 70 million

Two acquisitions in the Architectural Products Group in Florida and Alabama
combined with the construction of three large pallet paver plants in Arizona,
Pennsylvania and Maryland and the relocation of existing activities in Illinois;
purchase by the Precast Group of two businesses serving the states of Texas,
Arkansas, Georgia and South Carolina; acquisition by the Glass Group of a New
York-based glass fabricator; purchase of a distributor of roofing and siding
products by the Distribution Group.


Contact at Dublin 404 1000 ([phone])

Liam O'Mahony          Chief Executive
Myles Lee              Finance Director
Maeve Carton           Group Controller


Europe Materials : euro 19 million


The Europe Materials Division acquired two businesses in Finland and Poland in
the latter six months of 2004 at a total cost of euro 4 million. Annual
incremental sales amount to euro 4 million. In addition, the Division has
commenced a major capital project in Switzerland at a total projected cost of
euro 15 million.


Finland


With the objective of enhancing production efficiency and realising medium-term
savings in transportation costs, Lohja Rudus' aggregates division has recently
implemented a strategy to consolidate its quarry network in the vicinity of
Helsinki. In August, in the first phase of this strategy, Lohja Rudus purchased
the equity of Jersanmaki providing access to circa 1.1 million tonnes of owned,
high-quality aggregate reserves.


Poland


In November, Grupa Ozarow extended its presence in the aerated concrete sector
in Poland through the acquisition of Prebet Zelislawice. Aerated concrete is the
leading wall material in Poland and is a major downstream consumer of cement and
lime products. The company has annual sales of PLN 9 million and is located in
the province of Silesia in southwestern Poland.


Switzerland


Jura Cement has recently commenced a phased capital project to expand clinker
production capacity at its Wildegg facility in the German-speaking region of
Switzerland. With a target completion date of March 2006, the project will
facilitate increased usage of alternative fuels yielding significant savings in
operating costs.


Europe Products & Distribution : euro 109 million


The Europe Products & Distribution Division completed six deals in four of its
product groups at a total cost of euro 109 million including goodwill of euro 6
million. The annual incremental sales arising from these transactions amount to
euro 254 million.


Concrete Products Group

In October, the Concrete Products Group acquired the remaining 50% interest in
Kellen Concrete Products giving rise to incremental annual sales of euro 12
million. Full ownership of the Kellen business strengthens CRH's market position
in the Netherlands through the combination of its product portfolio with that of
Struyk Verwo and also facilitates the realisation of savings through optimising
capacity utilisation.

In December, the Concrete Products Group acquired Klaps, a leading manufacturer
of concrete paving, sewerage and water treatment products with annual sales of
euro 45 million and a total of five production locations in northern Belgium
adjacent to the Dutch border. Together with synergies stemming from more
efficient allocation of production across CRH's expanded plant network, the
acquisition significantly strengthens the Concrete Products Group's existing
businesses in Belgium creating leadership positions in many of its market
sectors and providing a strong distribution channel for further penetration of
the garden products segment in the Netherlands.


Insulation Group


The Insulation Group expanded its manufacturing presence in the United Kingdom
in November through the acquisition of the polyurethane/polyisocyanurate (PUR/
PIR) activities of Icopal. With annual sales of euro 16 million, the deal
provides additional manufacturing capacity to take advantage of anticipated
growth in the UK insulation market.


Building Products Group

In July, the Building Products Group purchased Mavotrans, a supplier of
metal-based construction accessories in the Netherlands with annual sales of
euro 8 million. Mavotrans will be fully integrated into Plakabeton, which was
acquired in April 2003 as a platform for entry into the construction accessories
business in Europe. In addition to the realisation of cost savings, the deal
provides clear leadership in the Dutch market and enhances Plakabeton's product
portfolio both in the Netherlands and in its other operations in Belgium, France
and Spain.


Distribution Group

In December, the Distribution Group purchased NCD Builders Merchants. The deal
also involved the purchase of the residual 50% stake in Gamma Sneek which had
originally been acquired as part of the Cementbouw transaction in October 2003.
The aggregate incremental annual sales amount to euro 173 million. NCD's network
of 17 stores in the Netherlands enhances market leadership and provides coverage
in regions where the Distribution Group's builders merchanting division has not
historically enjoyed a strong presence.

The joint venture company established by CRH (45% stake) and SAMSE (55%) has
acquired the remaining 7.8% of the share capital of G. Doras, a regional
builders merchant operating a total of 45 specialist and generalist builders
merchanting outlets in the Burgundy and Franche Comte regions of France. As
previously announced, the joint venture purchased an initial 34.7% stake in
December 2003 and augmented its shareholding to 92.2% in the first half of 2004.


Americas Materials : euro 111 million


The Americas Materials Division continued its development programme through the
completion of five deals at a combined cost of US$124 million (euro 100 million)
yielding annual incremental sales of US$67 million. Goodwill of US$4 million
(euro 3 million) arose on these transactions. The Division has also commenced a
major capital project at a cost of US$14 million (euro 11 million).


New York/New Jersey Division


In July, the Materials Group completed the acquisition of Passaic Crushed Stone
and Gallo Asphalt (collectively 'Gallo'), an aggregates and asphalt business
operating in northeastern New Jersey with annual volumes of 1.4 million tons of
aggregates and 0.3 million tons of asphalt. With owned and fully permitted
aggregate reserves totalling 300 million tons, Gallo's quarry at Pompton Lakes
provides strong and sustainable long-term reserves for Tilcon in the New Jersey
market. The transaction is an ideal fit with Tilcon's activities in New Jersey
and should generate significant benefits from consolidation of existing quarries
and savings in transportation and other operating costs.


In August, Callanan Industries purchased Amenia Sand & Gravel, an aggregates,
asphalt and readymixed concrete producer located in southeastern New York State.
The integration of Amenia into Callanan enables expansion of its market reach to
the east and southeast of its existing Kingston location.

Western Division


In October, Oldcastle Materials acquired an initial position in the materials
market in southern Oregon, adjacent to the border with California, through the
purchase of Klamath Pacific, a producer of aggregates, asphalt and readymixed
concrete. With total permitted aggregate reserves of 190 million tons located
within a 40-mile radius of its headquarters in Klamath Falls, the acquisition
provides a strong base from which to undertake future development activity in an
attractive region.

In December, the Materials Group acquired Rohlin Construction Company, an
aggregate, asphalt and paving contractor based in northwestern Iowa. Through
significant geographical overlap with existing aggregate and readymixed concrete
activities, the deal strengthens Oldcastle's market presence and enables the
Division to pursue growth opportunities in highway construction in western Iowa.



Central Division


Following the purchase of an initial 50% interest in a joint venture with the
Heritage Group in July 2001, Oldcastle Materials acquired the residual
shareholding in November 2004 giving rise to full ownership of a dolomitic
limestone quarry in the vicinity of Toledo in northwest Ohio with total
permitted reserves exceeding 200 million tons. The buyout of the joint venture
partner enables the Materials Group to benefit from the consolidation and
optimisation of aggregate volumes across its network of quarries in northwest
Ohio which were acquired through the S.E. Johnson transaction in May 2003.

In order to address capacity constraints at existing quarries in Pennsylvania
(PA), Oldcastle Materials has initiated a project to develop a greenfield site
located near Harrisburg, PA with in excess of 200 million tons of high-quality
permitted stone reserves. On completion of site development work and the
installation of aggregate processing facilities in the near future, the
subsequent phase will focus on erection of the asphalt and readymixed concrete
plants. At a total cost of US$14 million (euro 11 million), the new quarry will
enable the Materials Group to take full advantage of the promising market
outlook in the surrounding area.

Americas Products & Distribution : euro 70 million


The Americas Products & Distribution Division completed a total of six
acquisitions during the second half of 2004 at a combined cost of US$37 million
(euro 30 million) yielding annual incremental sales of US$74 million. These
deals generated goodwill of US$17 million (euro 14 million). In addition, the
Architectural Products Group has undertaken four major capital projects in
Arizona (AZ), Pennsylvania (PA), Maryland (MD) and Illinois (IL) at a combined
cost of US$50 million (euro 40 million).


Architectural Products Group (APG)


In December, APG purchased Anchor Block of Florida, a leading manufacturer of
segmental retaining walls (SRWs) and architectural masonry with two plants in
eastern and southwestern Florida. With annual sales of US$12 million and an
exclusive licence to produce Anchor retaining wall products in the state, the
deal complements APG's existing presence in retail garden walls (through Matt
Stone Company which was acquired in June 2003) and enables significant expansion
of its sales to the fast-growing commercial SRW sector.

In December, APG purchased Creative Surfaces, a single-site fabricator of solid
surface, granite and engineered stone countertops serving the Birmingham,
Alabama market with annual sales of US$3 million. The transaction represents the
first add-on to Custom Surfaces, 80% of which was acquired in March 2004. The
acquisition extends Custom's regional presence from its existing base in the
adjacent states of Georgia and South Carolina and enables it to pursue
opportunities in the high-growth markets of the southeastern United States.

As part of its continuing national capital expenditure programme to service the
fast-growing US homecenter and hardscape markets in the United States, APG has
begun construction of three large pallet paver plants in Phoenix, AZ, Easton, PA
and Crofton, MD. It is envisaged that commissioning of these facilities, which
have a combined cost of US$38 million (euro 31 million), will take place in
February, March and May 2005 respectively. Together with savings in terms of
freight and other operating costs, the plants alleviate capacity constraints at
APG's existing facilities in their respective regions thus streamlining
logistics, enhancing operational efficiency and enabling increased market
penetration.

APG has recently commenced a major project to consolidate, upgrade and relocate
the grinding and glazing operations of Trenwyth Industries in South Beloit, IL
to an 87-acre site in Channahon, IL and to greenfield a block machine at this
location. The total cost of the project, which is scheduled for completion in
mid-2005 and is the first component of a planned integrated manufacturing
complex at Channahon, is US$12 million (euro 9 million). The relocation of
Trenwyth's activities will remedy an existing capacity shortfall and will lead
to savings in handling and transportation costs. The new block machine will
enable APG to capitalise on growing demand in its homecenter and hardscape
business sectors.


Precast Group


Following three separate purchases of Newbasis assets in California, Georgia and
Florida in recent years, the Precast Group acquired Newbasis Central in August.
With annual sales of US$18 million, Newbasis Central is a leading manufacturer
of utility and drainage products in the important Texas market.

Also in August, the Precast Group's Southeast Division expanded its geographical
footprint through the acquisition of Mega Cast, a manufacturer of precast
concrete drainage products located near Savannah, Georgia with annual sales of
US$2 million. The transaction provides a platform for the introduction of box
culvert, utility and other Precast Group products into the southeastern Georgia
and South Carolina markets and facilitates the further development of drainage
products at the Jacksonville facility in Florida.


Glass Group


In July, the Glass Group acquired Floral Glass, a market-leading New York-based
glass fabricator performing tempering, insulating, laminating and
custom-fabrication activities at three strategically located manufacturing
facilities in New York State, Connecticut and New Jersey. With annual sales of
US$30 million, Floral significantly strengthens the Glass Group's presence in
the important Tri-state market (centred on New York City and including New York,
Connecticut and New Jersey) and provides substantial opportunity for realising
cost reductions from best practice initiatives and purchasing scale.


Distribution Group


In August, Allied Building Products continued its strategy of increasing its
presence in major metropolitan areas through the purchase of Metro Roofing
Distributors, a two-branch distributor of windows, siding and roofing products
in Boston, Massachusetts. With annual sales of US$9 million, the acquisition
provides a good entry point into the Boston market which exhibits
higher-than-average replacement activity stemming from harsh winter weather.


** Ends **

CRH plc, Belgard Castle, Clondalkin, Dublin 22, Ireland TELEPHONE [phone]
1000 FAX [phone]

E-MAIL [e-mail] WEBSITE www.crh.com Registered Office, 42 Fitzwilliam
Square, Dublin 2, Ireland


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